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Managing

Capability
Roadmaps
Uncovering and Mitigating Redundancy

White paper

12/31/2010 Copyright © All Rights Reserved 2010 1


Acknowledgements

12/31/2010 Copyright © All Rights Reserved 2010 2


Preface
Roadmap is a commonly used tool to communicate long term thinking effectively.
Strategists, planners, and architects use roadmaps to communicate their vision of strategic
capabilities and competencies. Stakeholders use roadmaps to baseline important, long
term decisions. However, roadmaps tend to get outdated over a period of time or are at
risk of becoming redundant putting based lined long term decisions at risk.

Investments in redundant roadmaps results in loss of competitive edge, missed growth


opportunities and questionable return on investments. The cost of remedying outdated or
redundant roadmaps increases exponentially with elapsed time. Proactive uncovering and
mitigation of roadmap redundancies is a critical success factor of long term strategic
planning.

This white paper presents a framework for managing capability roadmaps and facilitating
continuous assessment of roadmap value propositions. The framework can be applied to
enterprise architecture processes, product / system portfolio management functions as
well as other corporate improvement initiatives.

The capability roadmap management framework is a three tier structure, designed to


enable effectively governance of long term innovations, improvements, and investments.

1. Tier 1 – Foundation Tier:


Fundamental characteristics of
successful capability roadmaps
2. Tier 2 – Redundancy Detection Tier:
Patterns for uncovering redundancy
risks
3. Tier 3 – Risk Mitigation Tier:
Guidelines for proactive and
continuous adjustment of roadmaps

Capability roadmaps are strategic documents that outline an organizations long term view
or its core capabilities. Generally, capability roadmap is a five year projection of strategic
capabilities that drive an organizations growth, competitive edge and market share.
Capability roadmaps are also the foundation of strategic investment plans and enterprise
architectures. As such preventing the redundancy of capability roadmaps is (should be) a
top priority and managing capability roadmaps is a critical corporate competency.

The thought process highlighted in this paper should be improved upon by adopting the
framework, and advancing the framework through real world experiences and innovation.

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Fundamentals of Capability Roadmaps
Successful capability roadmaps have five specific characteristics that differentiate it from
redundant roadmaps. The presence of these characteristics has been proven to enable
early detection of redundancy risks thereby creating opportunities for timely mitigation.

The First Characteristic: Right Focus

Successful capability roadmaps focus on identifying core capabilities and competencies


critical to an organizations long term success. Capabilities and Competencies describe the
strategic “What” whereas the tactical “How” is described in system and migration
roadmaps.

Strategic Focus “The What”

Strategic focus should identify and define enterprise


capabilities and capability domains. Enterprise
capabilities are cross-functional in nature and
independent of organization structures. These
capabilities operate in an integrated environment to
enable enterprise processes.

Corporate competencies need to be developed for


implementing core capabilities. Competency centers
engage cross-functional resources and drive the
prioritization of capability implementations.

Tactical Focus “The How”


Tactical focus is driven by implementation of the
identified capabilities in the form of enterprise
systems. Identifying the minimum number of
enterprise systems required is a key success factor.

Migration roadmaps define the top-down


prioritization of implementing enterprise systems.
Without prioritization, system implementations
drain precious resources while delivering mixed
results in return.

Clear separation of strategic and tactical focus is


critical for successful long term planning.
Enterprise Architects should focus first on defining and managing capability and
competency roadmaps and work with IT on system and migration roadmaps.

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The Second Characteristic: Alignment of Core Roadmap
Elements

Capability roadmap is a composition of three core elements, capability progression, value


proposition, and investment plan. Capability progression defines the critical path of
advancing core capabilities. Value propositions define the long term applicability of
advanced core capabilities. Investment plans define the funding and ROI models needed
to support the development and implementation of advanced core capabilities.

Maintaining the right balance across


all three core elements is critical to
the long term success of capability
roadmaps.

Ability to provide credible value


proposition consistently is a
characteristic of a well balanced
capability roadmap.

The core elements of capability roadmaps are inter-dependent and overlap one another.

Capability progression is dependent


on an appropriate investment plan.
Investment plans are dependent on
valid value propositions. Value
propositions are dependent on the
definition of capability progression.

On the flip side, capability


progression is driven by the goals on
which value propositions are
defined. Investment plans are driven
by the projected advancement of
core capabilities and value
propositions are driven by the ROI
goals of investment plans.

The bi-directional, dependency – driver relationships between core elements needs to be


validated throughout a capability roadmaps life cycle. A change in any core element
causes ripple effect impacts. Capability roadmaps should define appropriate alerts to
analyze the impact of evolving systems and status of migrations. Alerts is a light weight,
event based mechanism for synchronizing inter-dependencies. Capability roadmaps
should embed redundancy alerts to identify potential redundancy risks.

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The Third Characteristic: Capability Progression Based on
Shared Vision and Understanding

Capability progression is typically illustrated as incremental evolution over a period of


time, with the ultimate goal of attaining a target state within the planned time frame.
Invariably, capability progression is tied to the evolution of an existing or a new system.
Each increment of the systems evolution has a specific value proposition that justifies
investments.
The right selection
and definition of
target state is critical
to the long term
applicability of
capabilities and the
value proposition of
the capability
roadmap.

A capabilities target
state is based on long
term vision and it’s
critical that the target
state represents shared
goals and objectives.

Similarly, a collective understanding of a capabilities current state is critical for


identifying the right transition path from the current state to the target state. Establishing
a common understanding
of the current state
facilitates determination of
the transition baseline.

Success of a capability
roadmap is based on
credible knowledge of the
actual transition scope aka
the gap between current
state and target state.

A vision plot is an essential


part of defining capability
progression. Without it,
there is no consensus for
capability progression.

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The Fourth Characteristic: Capability Model Based on Core
Properties

Capability is a composition of multiple properties where each property defines a discrete


component of the capability. These properties can be classified as fundamental
properties, derived properties, and applied properties.
Fundamental properties define the
basic components of a capability.
There are three fundamental
properties:
1. Concept
2. Data
3. Context

Every capability is fundamentally


based on these three properties.

The fundamental properties drive a set


of derived properties. Derived
properties provide capabilities with the
ability to adapt. There are four derived
properties:
1. Variable
2. Role
3. Interface
4. Information

Adaptability of a capability depends on


the definition and composition of derived properties.

Applied properties are the most


visible type of capability properties.
These properties define the
utilization of a capability. There are
two applied properties:
1. Feature
2. Function

Features and Functions drive the


long term applicability of a
capability

Identifying redundancy requires a capability model that can be used for objectively
assessing the properties of all capabilities. Every capability roadmap should have an
accompanying capability model capturing the underlying properties of individual
capabilities.

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Capability Model

A capability model is a set of relationships between properties across a set of capabilities.


Modeling the property relationships not only identify the common components across
capabilities also identifies inter-dependencies between properties. The identified inter-
dependencies are useful in assessing redundancies caused by introduction of new
property relationships.

Property relationships can be modeled using a four tier proper ordering scheme designed
to capture relationships in increasing order of complexity and dependency.
1. Tier 1 – Independent properties are modeled as first order properties. First order
properties include Concept, Context and Data
2. Tier 2 – Derived properties are modeled as second order properties, derived from
one or more independent properties. Second order properties include Role,
Information, and Variable
3. Tier 3 – Composite properties are modeled as third order properties, composed of
first and/or second order properties. There is only one third order property,
Information
4. Tier 4 – Identity properties are modeled as fourth order properties composed of
second and/or third order properties. There are two fourth order properties,
Feature and Function
Modeling the capabilities of a capability roadmap helps identify the shared properties
across the roadmap. Shared properties need to be carefully monitored as the impact of
capability redundancy can cause severe ripple impacts to other capabilities that share the
same properties.

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The Fifth Characteristic: Upfront Identification of Redundancy
Risks

Every capability roadmap has some inherent risk of redundancy. Specific capabilities of
the roadmap can be at higher risk of redundancy or an entire roadmap can be exposed to
redundancy risks. Identifying the type of redundancy threats can provide capability
roadmap managers the opportunity to monitor redundancy risk and take proactive
measures to mitigate potential redundancy.

What is Redundancy?

Redundancy in general is caused by duplication or similarity. Redundancy can occur at


any time primarily due to similar goals and objectives between two or more capabilities.

Not all redundancy is bad. The key differentiator between good and bad redundancy is
the factor of competition. When two capabilities with similar goals and objectives
compete with one another, one of the capabilities will become redundant. Instead of
competing, when two or more capabilities complement one another, then any potential
redundancy between the capabilities become a potential contingency mitigation asset. For
example, redundant (backup) networks or redundant infrastructure complement each
other and therefore create a safety net to mitigate emergency situations.

Capability Roadmap Redundancy Risks

Redundancy of capability roadmaps is especially bad because capability roadmaps are


expected to create long term competitive edge. Redundant capability roadmaps are bad
investment cases and should be mitigated as quickly as possible. There are three
redundancy risk common to all capability roadmaps:
1. Delayed implementation
2. Rapidly changing ROI opportunities
3. Emergence of new capabilities

• Delayed implementation impacts capability roadmaps and creates opportunities for


competing roadmaps to outrun the impacted roadmaps.
• Rapidly changing (either increasing or decreasing) ROI opportunities can impact
investment plans of one or capability roadmaps thereby increasing the risk of
roadmap redundancy.
• New capabilities emerging through innovation processes or aggressive competition
between existing capabilities can impact a roadmaps value proposition increasing the
risk of individual capabilities becoming redundant.
Known risks must be monitored and unknown risks must be uncovered and mitigated as
part of capability roadmap management processes.

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Uncovering Hidden Redundancy Risks
Redundancy in capability roadmaps can occur at many different levels. Specific
capabilities within a roadmap can have similar capability models, capability domains can
overlap causing redundancies in multiple capabilities, or multiple capability roadmaps
may have similar value propositions causing competition among roadmaps.

The first step in uncovering hidden redundancies is become aware of potential


redundancy, which is achieved by configuring redundancy alerts within capability
roadmaps. The second step is detecting specific redundancies; which is an elaborate
process of establishing capability reference structures and comparing suspect capabilities
against appropriate reference structures.

Potential Redundancy Alerts

Capability Alert

Capability alerts notify of potential redundancy of an existing capability caused by other


competing capabilities or emerging capabilities. The most common scenario for
capability redundancy is definition of new a concept, definition or capture of new data, or
understanding of a new context. In essence, as knowledge advances existing capabilities
are in danger of becoming redundant. Embedding capability alerts in capability roadmaps
facilitates proactive detection of potential capability redundancy.

Capability Domain Alert

Capability domain alerts notify of potential (new) competition between capabilities. A


typical capability domain contains capabilities that are cohesive and complementary to
each other. The redefinition of a capability domains boundary can result in overlapping
capabilities resulting in competition. As new capabilities are implemented in systems,
capability domains change (usually an expansion of scope). Sometimes this expansion in
scope of capability domains results in two or more capability domains overlapping one
another. Embedding capability domain alerts in capability roadmaps facilitates proactive
detection of potential capability competition.

Capability Roadmap Alert

Capability roadmap alerts notify of timely or delayed implementation of capabilities. For


a capability to be applicable it needs to be implemented by a system. Timely
implementation of capabilities is necessary for maintaining integrity of the value
proposition. Delays in system implementation dilute a capability roadmaps value
proposition and increase the risk of roadmap redundancy. Embedding capability roadmap
alerts in capability roadmap facilitates tracking the status of capability implementation.

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Redundancy Risk Detection

Detecting redundancy risks should be an objective, repeatable process that produces


consistent results. Consistent results are essential for identifying proper risk mitigation
steps. Consistency is based on objective analysis*. Objective analysis of redundancy
risks requires a credible reference point for assessing relative impact to capabilities and
capability roadmaps. Establishing credible reference points is a methodical process of
defining reference structures and assigning relevant, verified values. Without well formed
and complete reference structures, detecting risks becomes subjective, inconsistent and in
the end undependable.

Reference Structures

Two types of reference structures are necessary to enable objective analysis, Spectrums
and Grids.

Spectrums – A continuum structure

Spectrum is a continuum (logical range) of values that follow (comply with) a consistent
set of rules. Spectrums are good reference structures to classify and organize fundamental
properties of capabilities. Concepts, data, and context all have individual spectrums with
specific classification of contained values.
A concept spectrum
organizes concepts within a
logical range of four basic
categories, theorized
concepts, verified concepts
(POC- Proof of Concepts),
piloted concepts (initial
implementations), and proven
concepts (repeated, positive
ROI realized).
Data spectrums organize data within a logical range of m unstructured and structured
data models including raw data, free form data, hierarchical data, and relational data.

Context spectrums organize context within a logical range of increasing complexity


varying from standalone context to embedded contexts including derived context.

Concept, Data, and Context spectrums should be established and maintained as enterprise
reference structures independent of any specific capability roadmap. These reference
structures create a consistent set of standards for identifying redundancy risks.

*Objective Analysis: Seeking to evaluate based on relevant facts, regardless of feelings

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Grids – An intersection structure

Grid is a structure formed by intersections. Individual cells (intersects) of a grid indicate


or capture specific, unique values.
A grids size is
dynamic and depends
on new cells
emerging from
innovation and
improvements
triggered by
competition.

Capability grids are


formed by the
intersection of applied
properties (features
and functions).

All capability grids


evolve over a period
of time.
This evolution of capability grids can be modeled using different perspectives. Typically,
capability grids are modeled around three perspectives.
1. Capability innovation grid, model of new capabilities
2. Capability competition grid, model of capability improvements necessary to maintain
the capabilities value proposition
3. Capability balance grid, model of capabilities with balanced innovation and
improvements
These models create the possibility of assessing current capabilities relative to current
and future hypothetical capabilities. A model grid of innovative capabilities defines
higher than normal differentiation across capabilities. This is a grid of hypothetical or
emerging capabilities and the rate of adoption of these capabilities is predictably low.
Uncertainty of capability adoption increases the risk of redundancy in this grid. A
competitive capability grid model captures the measured performance of implemented
capabilities. This is a grid of proven capabilities but with likely overlap in properties.
This overlap increases the risk of redundancy especially as capabilities try to out perform
each other. Balanced capability grid model defines a portfolio of capabilities that have
been proven to perform and at the same time have a higher than normal differentiation
between capabilities. The risk of capability redundancy in this grid is relatively low due
to the overall balance of properties. Capability roadmaps strive to establish a balanced
capability grid.

Establishing capability grid models for all core properties is essential to objectively detect
short term and long term redundancy risks of implemented or emerging capabilities.

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Capability Grid Model

Capability grid models are reference structures for discovering and assessing discrete
capabilities. The grid models real and hypothetical capabilities in the current and future
context.

Discrete capabilities
are formed when a
feature and function
intersect.

Each intersect
represents a potential
transaction accessible
by a feature and
supported by a
function.

Transactions can be
combined
(aggregated) or
composed into
complex constructs.
Multi-transaction capabilities are formed when a single feature intersects with multiple
functions. These capabilities are able to perform multiple functions accessible through a
single feature. Similarly, an adaptable multi-transaction capability is formed when a
group of feature-function intersects perform a common set of functions. Adaptable
capabilities are able to provide multiple features that perform a common set of discrete
functions.

Every feature and function in the capability grid is a derived property. The dependency of
features and functions on other derived and fundamental properties results in the
capability grid becoming more dynamic and prone to changes. Connecting a feature and
function with other property grids helps maintain traceability with the fundamental
properties and detecting potential redundancies.

Well formed capability grids can identify or define capability domains. A set of cohesive
capabilities derived from similar features and performing similar functions can be
grouped into a capability domain. As new capabilities are identified the capability grid
expands causing existing capability domains to potentially expand or shrink. Sometimes,
new capability domains are identified that completely replace existing capability
domains.

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A well formed capability grid, representative of the enterprise scope is essential to
validate and identify redundant value propositions of capability roadmaps.

Feature Grid Model

Feature grid model is a structure of features, where each feature is formed by the
intersection of interface and information. Each cell in the feature grid model represents a
unique, discrete feature based on one or more interfaces that consumes changes, or
produces one or more information.
There are many types
of features that can be
composed from the
basic discrete
features.
Polymorphic feature
is composed of
multiple interfaces
and standardized
information.
Overloaded feature is
composed of a
standardized interface
and non-standardized
information.

Establishing a feature grid enables detection of redundant features across capabilities. For
example, a complex feature (one with multiple standardized and non-standardized
interfaces and information) can be split into polymorphic and overloaded features.

Function Grid Model

Functions define the basic purpose and behavior (value) of a capability. The purpose of a
function is based on a core concept. The behavior of a function is based variability.

Some functions have


very little tolerance
for variability (zero
tolerance for
variability results in a
constant function).
A function grid
identifies different
types of functions and
is useful in detecting

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redundancy of
purpose between
capabilities.

Interface Grid Model

Interfaces define accessibility of capabilities. A functionally rich capability is of little


value without proper, efficient access. The long term applicability of a capability depends
to a large degree of the type of interfaces.
A discrete interface is
formed and identified
when a role and a
context intersect.
Interface grids not
only categorize
interfaces but also
detect role driven
interfaces. This helps
in detecting redundant
roles and generic
interfaces (interfaces
used by multiple
roles).
As new contexts are defined, need for new roles can be detected when previously simple
interfaces begin to get more complex.

Information Grid Model

Information is the most sustained element of a capability roadmaps value proposition.


Typically, information generated by a capability persists longer than the capability.
Information is formed
by the intersection of
data and context.
Context provides data
with meaning thereby
transforming data into
information.
However, multiple
data within a single
context leads to
ambiguity. New
information can also
emerge from existing
data in new context or

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new data in existing
context.
Preventing redundant information triggered by new contexts and new data is important to
capabilities long term applicability. Information grids identify redundancy risks early.

Variables Grid Model

Variables represent the adaptability (or configurability) of a capability. Adaptability of a


capability is driven by a set of configurable (different values) variables. Variability is
relative property and is defined or formed by the intersection of a concept and its
applicable data.
Concepts such as parameters,
result sets, etc… inject
variability into a capability.

Variables grid established a


reference structure for
identifying the adaptability
potential of a capability.

Capabilities with a higher


potential for adaptability will
have a longer applicability.

When two or more capabilities with similar value proposition and/or property models are
to be assessed, the capability with lower adaptability has a higher probability of
becoming redundant.

Role Grid Model


Capabilities are ultimately based on the three fundamental properties, concept, context,
and data. As capabilities are implemented by systems the responsibility of managing the
concepts in the scope of a context is captured in the definition of a role.
Plotting the concepts and
contexts across all
capabilities of a capability
roadmap forms the role grid.
Each intersects of concept
and context is an indication
of a discrete responsibility
In practice, discrete
responsibilities are
aggregated into roles. This
aggregation process can
create redundant

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responsibilities across
capabilities.
Role girds facilitate detection of redundant responsibilities and prevent some of the
potential adoption challenges of implemented capabilities (systems).

Mitigating Redundancy
When redundancy is detected within one or more capabilities, the next step is to mitigate
the redundancy and preserve the value proposition of impacted capability roadmaps.
Fundamentally, redundancy mitigation is the process of merging redundant capabilities
and ensuring the merged capabilities ability to support value propositions of impacted
capability roadmaps. The direct impact of merging capabilities is on capability
progressions. Adjustments to impacted capability progressions are essential to preserve
the roadmaps value propositions.

Merging Redundant Capabilities

Similar to redundancy detection, merging of redundant capabilities should be an objective


process. One such objective process can be created by mapping redundant capabilities to
a complex evaluation grid. This mapping differentiates redundant capability with lower
value proposition from redundant capability with higher value proposition. The redundant
capability with weaker value proposition is merged and replaced with the redundant
capability with stronger value proposition. The result is one merged capability with
strong, long term value proposition. The complex evaluation grid is a hybrid of two
evaluation grids, a capability driver grid and a capability measures grid.

Capability
driver grid is
an intersection
of entities and
environments
responsible for
driving the
primary need
for a
capability.

Entities have
different
forms of
engagement
ranging from
active to
passive.

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Environments impose different types of structures ranging from very constrained to very
dynamic.

Capabilities implemented in constrained environments are less adaptable and therefore


carry a weaker value proposition compared to capabilities implemented in a dynamic
environment. Similarly the capability needs defined by active entities take on higher
priority compared to capability needs defined by passive entities.

Mapping redundant capabilities to the capability driver grid identifies the capability with
stronger value proposition.

Capability measures grid is an intersection of performance and innovation factors.


Capabilities with higher innovation generally tend to be more original in definition and
therefore have a higher probability of longer term applicability. Capabilities with low
innovation can be easily replaced and hence more redundant.

Performance of a capability is based on real (in field) observations. There is no doubt that
between redundant capabilities, high performance capabilities will replace low
performance capabilities.

The advantage of using a complex evaluation grid (combination of capability driver and
capability measures grid) is the resulting balanced assessment of redundant capabilities.
Ultimately, high performing original capabilities needed by active entities and
implemented in dynamic environment is preferred over low performing, redundant
capabilities need by passive entities and implemented in constrained environments.

Adjusting Capability Progression

Mitigation of redundant capabilities impacts capability roadmaps in different ways.


Capability
progressions
dependent on
single
monolithic
system,
experiences
bigger
challenges in
adjusting to
redundancy
mitigation
compared to
capability

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progressions
dependent on
a cluster of
systems.

When a redundant capability is replaced (merged) with another capability, the results
generally impact two or more capability roadmaps. One of the impacted roadmap
maintains the merged capability while other roadmaps become dependent on the merged
capability.

The impact of replacing redundant capabilities is smaller when capabilities are


implemented in a cluster of systems. As part of mitigating capability redundancy,
capability roadmaps should align capability progressions to a cluster of systems instead
of a monolithic system.

Recap
Capability roadmap is an effective tool for capturing and communicating the long term
vision of corporation’s core capabilities. These roadmaps need to be managed on a
continuous basis to preserve their value propositions. The biggest threat to value
propositions is redundancy caused by competition between similar capabilities.

An objective process for detecting


potential redundancies in capabilities
and mitigating redundant capabilities
is an essential part of strategic
planning and roadmap governance.

Establishing reference structures


such as spectrums and grids provide
the necessary standards for assessing
and merging redundancy.

A simple four step capability


roadmap management process
triggered whenever a new (real or
hypothetical) capability is defined is
useful in maintaining the integrity of
impacted capability roadmaps.

An unmanaged capability roadmap is


less likely to deliver on its promise
causing bad or failed investments
over a period of time.

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Capability roadmaps can achieve long term success only through continuous monitoring
of its capabilities performance, continuous improvement of its capabilities
implementations (systems) and continuous innovation leading to new capabilities that
replace existing capabilities. Capability roadmaps that do not innovate are eventually
replaced. It is only a matter of time.

About the Author


Atul Apte, WellPoint Inc.

References

Complementarities among Capabilities, Transaction, and Scale-Scope Considerations in


Determining Organizational Boundaries – Mario Morroni

How Capability Differences, Transaction Costs, and Learning Curves Interact to Shape
Vertical Scope – Michael G. Jacobides, London Business School, UK

An Open Marketplace for Services - Chris Harding, Open Group

12/31/2010 Copyright © All Rights Reserved 2010 20

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